ORLANDO, Fla. — Darden Restaurants plans to create the world's largest lobster farm in Malaysia, allowing it to sell the crustaceans in Asia and supply them to its restaurant chains such as Red Lobster.
The lobster farm would allow Darden to partially shield itself from rising seafood prices while creating a new revenue stream. But lobster farming, a field in its infancy because it has been notoriously difficult, could also keep prices lower for consumers and pose tougher competition for fishermen.
"If there's a way to do lobster this way, it increases the supply of lobster," said Mark Kalinowski, a restaurant analyst for Janney Capital Markets. "All else equal, the cost of lobster drops."
Darden says it thinks its facility will be the world's first commercial lobster farm. The company will work with a Malaysian group to build the 23,000-acre production facility. The farm will eventually churn out 40 million pounds of lobsters each year. That's about $1 billion worth.
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Darden says it will take a while to get to that point — at least 2029. It will take at least a decade before lobster sales have a big impact on the company's bottom line.
Construction should start next year, and the company hopes to start producing lobsters by 2017.
Lacking big claws that their counterparts from Maine have, the spiny lobsters Darden will grow look different from what typically comes to consumers' minds. So Darden will still use the North American species for its Red Lobster tanks and on the plates of diners who order whole lobsters. Darden already uses spiny, or rock, lobsters for some other dishes.
Still, Maine lobster fishermen worry about competition and the possibility that the price of their catch could get driven down.
"It does put additional supply out there, and when you have oversupply, you can see a softening of the price," said Patrice McCarron, executive director of the Maine Lobstermen's Association.
Darden has experimented with lobster-aquaculture projects in other countries. The company said it decided to base its farm in Malaysia because tropical storms are infrequent, lobsters there reach maturity relatively quickly and the government is encouraging economic development.